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"Payments fraud has the potential to erode public trust in—and undermine the safety, accessibility, and efficiency of—the nation's payments system, upon which the U.S. financial system depends.""No agency or private-sector entity can address payments fraud on its own."Payments fraud data is currently "collected in an incomplete, non-standardized, ad hoc, and fragmented way."
This podcast provides you the ability to listen to new regulatory guidance issued by the National Credit Union Administration, and occasionally the F D I C, the O C C, the F F I E C, or the C F P B. We will focus on new and material agency guidance, and historically important and still active guidance from past years that NCUA cites in examinations or conversations. This podcast is educational only and is not legal advice. We are sponsored by Credit Union Exam Solutions Incorporated. We also have another podcast called With Flying Colors where we provide tips for achieving success with the N C U A examination process and discuss hot topics that impact your credit union.
Samantha: Hello, this is Samantha Shares.
This episode covers
Fighting Payments Fraud: A Deep Dive into
Federal Banking Agencies' New Initiative
The following is an audio
version summary of that document.
This podcast is educational
and is not legal advice.
We are sponsored by Credit Union
Exam Solutions Incorporated, whose
team has over two hundred and
Forty years of National Credit
Union Administration experience.
We assist our clients with N C
U A so they save time and money.
If you are worried about a recent,
upcoming or in process N C U A
examination, reach out to learn how they
can assist at Mark Treichel DOT COM.
Also check out our other podcast called
With Flying Colors where we provide tips
on how to achieve success with N C U A.
And now summary of the request for
comment on fighting payments fraud.
Fighting Payments Fraud: A Deep Dive into
Federal Banking Agencies' New Initiative
today we're diving into a significant
new initiative from three major
federal banking agencies to combat
the growing threat of payments fraud.
On June 20th, 2025, the Office of
the Comptroller of the Currency, the
Federal Reserve System, and the Federal
Deposit Insurance Corporation jointly
issued a Request for Information
seeking public input on how to better
address payments fraud across the U.S.
financial system.
The Growing Problem
Let's start with the scope of the problem.
According to the agencies, payments
fraud is inflicting significant
harm on consumers, businesses,
and financial institutions.
They define payments fraud as quote
"the use of illegal means, including
intentional deception, misrepresentation,
or manipulation, to make or receive
payments for personal gain."
The numbers are staggering.
Data from the Federal Trade Commission
shows that losses reported for
non-card payments fraud increased
271 percent between 2020 and 2024.
Meanwhile, data from the Treasury's
Financial Crimes Enforcement Network
shows that Suspicious Activity
Reports filed related to check,
ACH, and wire fraud have increased
489 percent between 2014 and 2024.
Check fraud is particularly concerning.
The Treasury Department reports that
check fraud in the United States has
risen 385 percent since the COVID-19
pandemic, and FinCEN reports that check
fraud accounted for approximately 30
percent of fraud-related Suspicious
Activity Reports filed in 2023.
Why This Matters
The agencies emphasize that payments
fraud quote "has the potential to
erode public trust in—and undermine
the safety, accessibility, and
efficiency of—the nation's payments
system, upon which the U.S.
financial system depends."
What makes this particularly challenging
is that, as the agencies note, quote "a
payments fraud scheme may involve multiple
institutions and payment methods, each
of which may fall within the remit of
different Federal and State agencies."
They acknowledge that quote "no
agency or private-sector entity can
address payments fraud on its own."
Five Key Areas for Action
The Request for Information focuses on
five potential areas for improvement:
1.
External Collaboration The agencies
are asking: What actions could
increase collaboration among
stakeholders to address payments fraud?
They're particularly interested in
standard setting and identifying
organizations outside the payments
and banking industry that might
provide additional insights.
2.
Consumer, Business, and Industry
Education While financial education
resources exist, the agencies
recognize there may be a need for more
specific payments fraud education.
They're asking what types of
education are most effective and how
to make existing resources better.
3.
Regulation and Supervision The agencies
want input on potential regulatory
changes and whether existing supervisory
guidance is sufficient and clear.
They're particularly interested in how
to help small community banks detect,
prevent, and mitigate payments fraud.
4.
Payments Fraud Data Collection and
Information Sharing Currently, payments
fraud data is, quote "collected in
an incomplete, non-standardized,
ad hoc, and fragmented way."
The agencies are exploring ways to
improve data collection and sharing while
addressing privacy and legal concerns.
5.
Reserve Banks' Operator Tools and
Services The Federal Reserve Banks
already provide risk management tools,
but they believe quote "there may be
further opportunities for the Reserve
Banks, as a payments system operator,
to provide additional tools and services
designed to reduce payments fraud."
Specific Focus on Check Fraud
Given the particular problem with
check fraud, the Federal Reserve
is specifically seeking input on
potential amendments to Regulation
CC, which governs funds availability.
They're asking whether technological
advancements have reduced the
time it takes to detect fraud
such that funds availability
requirements should be shortened.
The Fed notes that checks contain
sensitive information including quote
"the payor's name, account number, routing
number, address, and signature—that
can be used by criminals to conduct
other forms of payments fraud."
Looking for Solutions
The agencies are asking some practical
questions that affect everyday banking:
• Should Reserve Banks require fraud
reporting for all payment rails?
• Would confirmation of payee services
help mitigate fraudulent payments?
• How can financial institutions
better resolve disputes about
allegedly fraudulent checks?
• What technological solutions have been
most effective in preventing fraud?
Industry Impact
The document reveals that the
agencies have quote "received
complaints from supervised
institutions regarding challenges in
resolving disputes about liability
for allegedly fraudulent checks."
This suggests the problem is
significant enough that banks are
actively seeking regulatory guidance.
Next Steps
Comments on this Request for Information
are due by September 18, 2025.
The agencies are particularly interested
in hearing from a variety of stakeholders
including consumers, businesses, financial
institutions, and technology providers.
As one of the questions in the
RFI asks: quote "What measures,
including technological solutions or
services, have been most effective in
identifying, preventing, and mitigating
payments fraud at your institution?"
Conclusion
This comprehensive Request for
Information represents a significant
coordinated effort by federal banking
regulators to tackle payments fraud.
With fraud losses in the billions
and growing rapidly, the agencies are
clearly taking a proactive approach
to protect consumers and maintain
confidence in the payments system.
The 26 detailed questions they've
posed show they're serious about
getting input from all corners of
the financial services industry.
Whether you're a bank, a fintech
company, a consumer advocate, or just
someone who's been affected by payments
fraud, your input could help shape the
future of fraud prevention in America.
That's all for today's deep dive into
the federal response to payments fraud.
Thanks for listening
________________________________________
This podcast script is based on
the Federal Register document
dated June 20, 2025, Volume 90,
Number 117, pages 26293-26298.
This concludes our summary.
If your Credit union could use assistance
with your exam, reach out to Mark Treichel
on LinkedIn, or at mark Treichel dot com.
This is Samantha Shares and
we Thank you for listening.